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Under the terms of the contract, which began this week, Capita will handle the full range of routine customer contact operations, such as customer service, product and sales enquiries for the four electronics chains. Dixons Group will pay Capita an annual fee of approximately £18m subject to the achievement of agreed performance standards and targets.

Capita will also assume Dixons Group's contract for the provision of narrowband technical support to Freeserve customers. It will also handle insurance-related customer enquiries for Dixons Group Insurance Services. Dixons will continue to provide all other technical support contact services to customers in-house.

Under the agreement, the 800-strong workforce based at Dixons Group's Nunnery Square site in Sheffield will transfer to Capita and continue operating from the same facility.

Capita has committed to a range of customer service and systems enhancements that will ensure more effective transfer of information between customers, the contact centre and business unit teams.

Enhancements will include the re-design of current processes, introduction of voice recognition software and improved monitoring of contacts to further improve the quality of the customer experience.

A Capita team will manage the transition and transformation programme alongside existing management.

John Clare, Dixons Group chief executive, said, "We are determined to find new ways of improving and broadening the services that we offer the millions of customers that shop with us every year. I am confident that our relationship with Capita will bring significant benefits and service improvements to customers over time."

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